Why We’re Eager to Waste Money on Luxurious Things but Become Greedy in Everyday Life

According to a survey, people on average leave more than a 20% tip in restaurants. At the same time, almost no one refuses their change while buying groceries at the market. The statistics also show that 1 in 5 iPhone owners have permanent money problems.

We decided to find out what motivates people to behave like this and we can’t wait to share our observations with you!

1. We don’t notice the difference when the amount is large.

Why We’re Eager to Waste Money on Luxurious Things but Become Greedy in Everyday Life

After eating dinner in a restaurant, the waiter brings you a bill for $43. You’ll probably give them $50 and forget about the change. You may decide that this is a relatively small amount because the cost of your food was over 6 times more than that.

Another situation is when you buy 6 pounds of potatoes from a farmer for $3 and give him $5. It’s unlikely that someone will refuse their change because for that money, it’s possible to walk away with double the potatoes.

2. We’re secretly affected.

Why We’re Eager to Waste Money on Luxurious Things but Become Greedy in Everyday Life

Being a good marketer is a difficult science. It’s based on human psychology and if you don’t know how to sell an ordinary pen for $100, there’s a small chance you’ll be employed by anywhere prestigious. There are many tricks that are designed to make you more inclined to make a purchase. At first, the seller will likely offer something for free to incite reciprocity and then show you how great a product is by way of social networks.

3. We don’t want anyone to think poorly of us.

Why We’re Eager to Waste Money on Luxurious Things but Become Greedy in Everyday Life

Now psychology comes into play again. In this case, we’re talking about a sort of crowd effect. In expensive cafés and restaurants, waiters often don’t bring change until you ask them for it and people there usually tip generously. Subconsciously, we begin to think that it’s wrong to act differently and begin to behave the same way as the other patrons.

4. We feel relaxed by expensive surroundings.

Why We’re Eager to Waste Money on Luxurious Things but Become Greedy in Everyday Life

What unites a branded clothing store, restaurant, and car dealership? The surroundings! Owners of these establishments use expensive designs and high-end furniture not just to spend extra money, but to immerse us in an atmosphere of luxury. In places like this, it’s easy to “forget” about counting every penny.

5. We want to impress people around us.

Why We’re Eager to Waste Money on Luxurious Things but Become Greedy in Everyday Life

An experiment in behavioral economics revealed that if you give people the choice to earn $50,000 while the rest earn $25,000; or earn $100,000 while others get $200,000, most people would choose the former options. This fact confirms that oftentimes, we’re prone to try to impress people — it’s in our nature. So paying more money than required can be one way of doing this.

6. We really like the service.

Why We’re Eager to Waste Money on Luxurious Things but Become Greedy in Everyday Life

If you really like something, chances are you’re willing to pay a little more for it. There are quite a few places in the world that justify their high prices. When dealing with polite workers, delicious food, and prompt service, why not thank them by paying a few extra bucks?

Have you ever noticed that you spend money on unnecessary things? Which purchase do you consider the most meaningless in your life?